20040407min.doc

IDAHO PUBLIC UTILITIES COMMISSION

MINUTES OF DECISION MEETING

APRIL 7, 2004 – 1:30 P.M.

In attendance were Commissioners Paul Kjellander, Marsha Smith and Dennis Hansen.

Commissioner Kjellander called the meeting to order. The first order of business was approval of the CONSENT AGENDA, item 1. There were no comments or questions. Commissioner Kjellander made a motion to approve the Consent Agenda item. A vote was taken and the motion carried unanimously.

The next order of business was MATTERS IN PROGRESS:

Scott Woodbury’s March 25, 2004 Decision Memorandum re: Agreement for Sale and Purchase of Electric Energy; Idaho Power/United Materials of Great Falls, Inc., Case No. IPC-E-04-01 (Idaho Power).

Mr. Woodbury reviewed his Decision Memo. Commissioner Smith commented that although some of the commenters thought some of the contract provisions were inappropriate, in her view, we are in uncharted waters and it would be her preference that if these parties have bargained for these terms and want to agree to them then the Commission shouldn’t stand in the way. She said that doesn’t mean other potential developers or parties who contract with Idaho Power will have to have the same terms. She invited other developers to propose different provisions for the Commission’s consideration if they submit their contracts. She said that with regard to the environmental attributes provision, the parties ought to negotiate what they think is right.

Commissioner Hansen asked about the risk United Materials would have regarding delivery of electricity due to transmission capacity and interruptions and if there is a concern that the power generated in Montana won’t be able to get to Idaho. Monica Moen of Idaho Power replied that Northwestern Energy is going to firm all transmission delivery for the project so there is some assurance there.

Commissioner Smith made a motion to approve the contract with the understanding that the non-standard terms dealing with firmness and seasonality are not precedential for other developers, and other developers are free to submit their own contracts with their own provisions. A vote was taken on the motion and it carried unanimously.

Scott Woodbury’s April 5, 2004 Decision Memorandum re: Petition for Declaratory Order, Ownership of Marketable “Environmental Attributes” Associated with PURPA QFs; Case No. IPC-E-04-2 (Idaho Power).

Mr. Woodbury reviewed his Decision Memo. Commissioner Smith stated it is her opinion that this matter is not ripe for the Commission’s consideration. She said she did not agree or disagree with the petitioner or any of the commenters, but the matter turns on the issue of whether you have a program for renewable energy credits. She stated there is a group—WREGIS—that hopes to have a program available by the end of the year for the entire western interconnection. She said this Commission has not addressed setting up a program for renewable energy credits and so it would be her preference that the Commission not weigh in on any of these issues until such time as we are considering having such a program. Commissioner Smith made a motion that the Commission return the Petition, stating that we feel this issue is not ripe for Commission consideration. A vote was taken on the motion and it carried unanimously.

Scott Woodbury’s March 26, 2004 Decision Memorandum re: Proposed Modifications to PURPA Contract Security Provisions, Case Nos. IPC-E-03-16 (Idaho Power); AVU-E-03-09 (Avista); PAC-E-03-13 (PacifiCorp).

Mr. Woodbury reviewed his Decision Memo. Commissioner Kjellander asked what the $1,500 cost associated with the second lien would be for. Mr. Woodbury replied that the $1,500 would be for estimated legal costs incurred by the company to acquire the second lien, prepare the papers, file them, etc.

Commissioner Hansen stated he agreed with the Staff that it is justified to continue to require second lien security rights, and he agreed the company should be allowed to collect the cost of the second lien directly from the QF and it should not be covered in the PCA. He made a motion to accept staff’s recommendation that the legal fees to establish the second lien be directly charged to the QF and not recovered through the PCA. Commissioner Smith asked if the motion included the recommendations of the company and staff with regard to the modifications to the insurance requirements. Commissioner Smith said she would support the staff’s proposed modifications to the company’s insurance requirement recommendations and would oppose PacifiCorp’s expansion to automobiles and worker’s comp. Commissioner Hansen stated that he agreed and added those recommendations to his motion. A vote was taken on the motion and it carried unanimously.

There were no further items before the Commission and Commissioner Kjellander adjourned the meeting.

DATED this _____ day of April, 2004.

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COMMISSION SECRETARY

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